MIHAJLOVIC: Russian loan agreement not to be terminated

(Zorana Mihajlovic) Deputy Prime Minister and Minister of Construction, Transport and Infrastructure Zorana Mihajlovic stated that the agreement on the USD 800 million Russian loan meant for Serbian Railways wouldn't be terminated, as that would entail the cessation of the construction work.

The Government of Serbia won't give up the Russian loan meant for Serbian Railways, but the ministries of finance of the two countries will have to agree on extending the loan availability period, B92 reports.

– We are far from the termination of the loan agreement. I can say that as the Minister of Transport. The agreement and the contract on the loan will need to be extended, because the loan has not been used in the amount in which it was meant to be used – Mihajlovic said.

She added that the Ministry of Construction, Transport and Infrastructure hadn't received any calls either from the Serbian or the Russian Ministry of Finance asking for the modification of the loan agreement.

– We are here to use everything we can and I wouldn't like for any changes to take place at this moment, because that could mean the cessation of the construction work – Mihajlovic pointed out.

The Ministry of Finance said that the loan had originally been available until December 31, 2017 and that the length of the period was insufficient for the planning and construction work to be completed and that negotiations were in progress about the extension of the deadline.

The reconstruction of the Bar railway on the Resnik-Valjevo section, which will be financed from the Russian loan, should start on Friday, in the presence of the first vice president of Russian Railways.

The Russian agreement on the loan in the total amount of USD 800 million was made in 2008 by Serbia and the Russian Federation, of which 300 million was used so far.

The loan is meant for the construction work and modernization of the Belgrade-Pancevo railway, six sections on Corridor X, the reconstruction of the Resnik-Valjevo section of the Bar railway, the modernization of the Stara Pazova-Novi Sad railway and the procurement of 27 new Russian diesel engine trains.